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Page | 3 SBWMA Recology Negotiations FAX Report 4/20/17 1. RECOMMENDATION The South Bayside Waste Management Authority (SBWMA dba RethinkWaste) is close to completing a year- long negotiation process with Recology of San Mateo (Recology), to extend their hauling contract beyond 2020. The following provides the recommendations agreed upon by the SBWMA, Franchise Agreement Extension Negotiation Ad Hoc Committee (FAX), the Technical Advisory Committee (TAC), and the Financial Committee. 1. Authorize staff to provide the SBWMA Board with a Model Franchise Agreement with Recology San Mateo County (Recology) to provide Recyclable Materials, Organic Materials, and Solid Waste Collection Services for 15-year term of January 1, 2021 through December 31, 2036. The Model Franchise Agreement will have been mutually agreed upon by SBWMA’s TAC/FAX/Staff and Recology, and provided to the Member Agencies for use to finalize their own agreements. The goal of the negotiations process is to pursue a sole source agreement with Recology and not to pursue a public procurement process. 2. Authorize staff to provide the SBWMA Board with a base-cost proposal for all core collection services outlined in the Model Franchise Agreement to be provided to all 12 Member Agency for 2021 (also known as rate year 11). 3. Authorize SBWMA Senior staff to provide technical support with each of our 12 member agencies during their entire negotiation process with Recology as they discuss agency-specific services and costs (beyond the base-cost proposal). 4. Once the Model Franchise Agreement with Recology is accepted by the SBWMA Board, each Member Agency will negotiate with Recology any Member Agency-specific considerations for approval by December 31, 2017. The SBWMA TAC/FAX Committees and Recology have agreed to the base-cost proposal for all core collection services, and are in the process of finalizing the Model Franchise Agreement. The TAC/FAX/Staff negotiations team recommends moving forward with the current cost proposal because it has been determined that it is a “good deal” for the Member Agencies. Nearly every aspect of the cost proposal has been reviewed and was deemed “reasonable” and “within local market pricing”. However, the team was unable to receive satisfying cost detail from Recology on what their general and administrative (G&A) costs were in this proposal (these costs represent about 16% of the total cost and increase from 2016 to 2021). Although Recology has not provided sufficient detail in this area, the TAC/FAX/Staff team acknowledges that the G&A costs are within the average for the industry and, therefore, should not hold up the Agreement process. First Amended and Restated Joint Exercise Powers Agreement SBWMA Article 7.1.1.c: “Entering into or amending Franchise Agreements for the operation of the Facilities require the approval of two-thirds vote of its members”. 7.A - Page 13